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Bailout payout tops $8 trillion

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As the holiday season begins, it's worth examining the last gift that Bush and Congress left for taxpayers.

There is a bright side, sort of. Only about $2.9 trillion of the government money, loans and guarantees have actually been spent or committed.

And some of the deals are structured with the idea that taxpayers could one day make money off them by selling pieces of companies or the government’s new stake in them.

But that can’t be done until the economy rebounds, something that most economists aren’t yet willing to predict — probably because it would be even more depressing.

Now, all this is not to say that these measures weren’t necessary to save consumers from an even worse fate. That’s a big unanswered question that now will be left to speculators.

But the vast majority of the smart economic crowd, from both sides of the aisle, say the job losses and economic calamity that would have ensued without government intervention today would make the Great Depression look like an economic hiccup.

“If we don’t fix this, it doesn’t matter if we can’t pay for it,” said Heather Boushey, a senior economist at the Center for American Progress. “The problem will only get worse and become harder and even more expensive to fix.”

Meanwhile, she said, unemployment rates could soar abruptly, as they did during the Depression. “Every person who loses a job could also lose a house and health insurance and the ability to pay for college,” she added. “We could lose a generation.”

Given that, it was something of a wonder when Senate Republicans quashed a $14 billion rescue plan last week for domestic automakers.

Republicans had taken a beating on Election Day, in part because of resentment within their own base at the bailout bonanza in Washington.

But the automakers’ request seems a pittance given all the taxpayer cash already flooding the private market.

Part of the answer might have come from an Obama-style Internet campaign launched by FreedomWorks, a grass-roots organization led by former House Majority Leader Dick Armey (R-Texas).

FreedomWorks purchased Google search ads that popped up any time someone clicked for information about the auto bailout. The ad urged people to oppose the measure.

Thomas Keeley, the organization’s online advertising specialist, said the ad helped them generate nearly 100,000 messages to Congress. “We did very well, especially given the limited time we had on this,” he said.

The auto industry wasn’t idle. General Motors and Ford also took out Google search ads urging support for the package — a message that would have been tough to deliver in a big television ad campaign.

The cyberspace campaigns are likely a harbinger of how future bailout battles will be waged once Obama takes office with an e-mail list of more than 10 million supporters.

Already, Peter Greenberger, who’s heading up Google’s new issues advocacy sales team, says he’s warning interest groups that may take a stand on either side of the Democrats’ expected trillion-dollar stimulus package not “to organize a 20th-century advocacy campaign against a 21st-century administration.”

Readers' Comments (71)

Congress believes that not only our money belongs to them, but our children's and grand children's as well. Congressional spending is bankrupting the future of this country. At some point in the future, countries like China are going to want their money back. The current members of Congress will be gone.

The large corporations have lived the life of Riley for the last eight years. They've gotten everything their way and have enjoyed record profits. So why are they all lining up for a hand-out all of a sudden? I thought the private sector could do no wrong!

If the government had screwed up so royally, we would all be talking about how rotten government is, and how government always fails.

In a country with a less anti-government bias, we'd be having a robust debate over the validity of the capitalist system right now.

This Auto-Bail out is nothing but "Welfare for the UAW." Another GRAND accomplishment from the BUSH Administration ! Bush has turned his back on the Majority of American Taypayers Who are against any Bail-out (without immeadiate substancial cuts to the Wages, benefits and perks that the UAW has refused to budge on ) consistantly throughout his Administration. Now he turns his back on them, yet again, along with his own Republican Senators who have taken a stand for the Taxpayers of America. The WORST PRESIDENT WE HAVE EVER HAD !!!

This Auto-Bail out is nothing but "Welfare for the UAW." Another GRAND accomplishment from the BUSH Administration ! Bush has turned his back on the Majority of American Taypayers Who are against any Bail-out (without immeadiate substancial cuts to the Wages, benefits and perks that the UAW has refused to budge on ) consistantly throughout his Administration.

I see you're not living on this planet. Contrary to what comes out of your union-bashing piehole, the UAW has consistently worked with the Big 3 to reduce the workers' wages and benefits. In fact, workers at foreign carmakers' plants in the South occasionally make more money per hour than their Detroit brethren thanks to a profit-sharing deal. The big difference lies in healthcare: Detroit has a huge legacy cost compared to foreigners, which haven't been around for too long yet, and the foreigners' domestic workforces all enjoy universal healthcare. So next time your brain conjures up something untrue, go to the bathroom and read the comics, okay? The days of truthiness are over.

It's a very risky game the Treasury, the Federal Reserve, the FDIC, and other government agencies are playing. It may turn out well... if it does, I hope someone will be able to find out which of the government actions were effective and which ones didn't work or were counter-effective. OTOH, if it doesn't work, at least no one will be able to say that the government just stood by idly and let it happen. What makes this exercise even trickier is that, while the focus is quite rightly on deflation right now, it will have to shift to inflation without a pause almost immediately after a recovery starts. There is just too much money floating around and available for lending -- as soon as the lending starts, the Fed will have to begin sucking up some of those excess reserves, if hyperinflation is to be avoided.

WHO SAID THERE'S NO JUSTICE? BARNEY FIFE FRANK AND ALL HIS dumocratic buddies who started this mess by GIVING homes to poor people to buy their votes, will now reap the disaster they created! ALL the 'usual suspects' are in office! The HOUSE, SENATE, and WHITE HOUSE! THE dums will have this mess " around their necks " for years to come! WHOOOOOOOOOOOOOOOOOOOOOOHEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Geioorge W. Bush and Dick Cheney are hell bent on destroying this nation and the activity will continue until the day they have to leave the White House It is the NWO who is behind them. I am not sure they do not have a coup in the works with the military industrial complex

Congress is working on a usury law and the bill has 1,000 pages. That should tell you everything you need to know. Most of the US congress is bought and paid for and nothing will change. If legislation is over twenty pages long it is pure junk.

McCAIN AND SARAH HAVE TO BE LAUGHING THEIR A**ES OFF RIGHT NOW! " IT'S ALL YOURS, BARACK AND hillbillary, HAVE FUN! " WHOOOOOOOOOOOOOOOOOOOOOOOOOOOHEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Congress authorizes the bailouts and decides the terms and recipients. Democrats control Congress. Bush has nothing to do with the creation or the corrupt existence of the UAW - the bailouts for the unions are strictly a Democrat subsidy for their constituents. Bush is an idiot for going along with the subsidization of failed companies. The "Big 3" have been hemorhaging money for decades, producing inferior products at high prices for people who don't want them, and have been run into the ground by incompetent leadership and union thuggery. Now the bill is coming due, and they don't want to pay it. Democrats in Washington don't want to lose their power over the automakers either, since they're trying to force them to produce "green cars" which nobody will buy either (because, after all, this is not aboutfiscal sanity - this is about a political agenda). The GOP doesn't want to be "insensitive," so they'll just go along with it and get blamed for anything that goes wrong (which it will, because it is inherently flawed policy), whether they're responsible or not. Which, in this case, they really aren't.

The last time you morons in Congress tried to buy votes, you imploded one-fifth of the nation's economy and got this whole financial mess started. Community Reinvestment Act - the decades-old Democrat-backed government mandate that mortgages be given to those who couldn't afford them and couldn't pay them back it caused the Fannie-Freddie collapse, which in turn caused the collapse of the real estate market. Google it. Thanks for screwing the economy, Congress.

Newsflash: The dolts in Congress are all idiots - neither party has a monopoly on virtue and both have a competeing monopoly on corruption and stupidity.

I swear, some of the commentors on these boards have to be eight years old. If they're grown adults, then they should be quarantined so that their stupidity can not infect other gullible Americans

1. We need to stop referring to the "auto bailout" and start referring to it as the "UAW bailout." Since the nuts and bolts of the issue is the 130,000.00 annual wage of UAW employees in Detroit vs. the 75,000 annual wage of the transplant auto company employees in the South. It must be nice to make UAW wages and benefits and that is why Gov Blago wants a Union Job as kickback. Had Sarah Palin thought of it before Blago, then she would be looking for a Union Job (for now though, RNC clothing allowances seem to be doing her well enough).

2. The Gross Domestic Product of the US is about 14 trillion dollars a year. So therefore the US public is now on the hook for almost that in this current government schema. That means every single service, automobile, product, wage and everything produced for an entire year is now owed to the government for getting involved. That is about as close to a planned socialist economy as you can get without actually living in a 1978 Moscow Apartment Complex.

3. That is tacked onto the largest public debt in world history. In otherwords, it is so large and money is owed to so many, that the US Government has become a new type of world government money printing agency along with their apolitical Federal Reserve. The most they can hope to do at this point is just pay interest payments. They can no longer repay the debt without going completely out of business (no government spending for about 5 while still taking in tax reveunues). Since much of the public sector also relies on government spending for jobs, then no government spending is not an option without loosing another 30 million good paying jobs in the country. That kind of makes the UAW seem like small potatos.

4. Basically all US land space outside of Texas (Bureau of Land Management Land) is on the hook, and as the government stakes stock claim into companies and banks, then they too are on the hook for default of this loan that is in effect in default since they are barely making interest payments. Some could argue that every man woman and child and every yet to be born man woman and child in the US is on the hook as long as they are issued a Social Security Number.

5. Social Security is the world's largest Ponzi Scheme which has to come up with 40 trillon dollars in payments to retired folks within the next 15 years and the money does not exist. At 14 trillion dollar GDP then everything made, wage produced and service performed for about 4 years straight goes totally toward people who produce nothing.

6. Americans are bad at math.

7. The rest of the world bought into American math so they are screwed too.

8. It is hard to say if there will be a collapse now or if the world will just allow the US Gov/Federal Reserve to print money without inflation or hope of payback for lending this money to the world.

9. It has become too big of a problem to understand how it will eventually all play out.

10. Most things play out with a real element to it. What that means is that Pirates, Terrorists, and rouge nations are a threat to number 8 above and if panic ensues, then the ponzi scheme finally crashes. My guess is that the terrorists fully understand this and have for some time. That is why a full nuclear war between the US and Russia for example, is not our major concern for bringing down the system. It is likely to be a surprise attack. Unless people know what to do in the advent (for example, NYC was blown away and 5 million people dead just as an example) then panic ensues bringing down the entire world system. With just one or a handful of attacks. Since the government has no plan for Civil Defense as was the case in the Cold War from Korea to 1980, then the people are left to fend for themselves in social disorder. The other option would be for states to come up with their own Civil Defense plan (the original intent of the National Guard) that would effectively over-ride central command and control at the US/National level since we can assume that if enough attacks occured or EMP caused widespread outages, then for sometime Command and Control would be lost. Therefore, it is my recommendation that governors move swiftly to institute plans at the county level to handle any type of event as heretofore discussed. We have to go back to a bottom up strategy (private to general) if a top down strategy fails (general to private) due to lack of Command and Control.

PERRYlOGAN SAYS: Say...don't all these bailouts prove that capitalism doesn't work? No, It proves that the system of Business suffocating labor unions doesn't work. Does Toyota need a handout? No because they don't give huge pensions and other benefits to retirees who are 49 yrs old! We should be having a debate about the validity of unions. Of course, that would be blasphemy.

It seems to me that our best hope now lies in the Association of Governors. That becomes our shaddow government in the event of Washington's failure.

1. We must come to the realization that California is lost. It has 47 billion dollars in unpayable debt and is imposing even further environmental regulations on themselves to pretend to be some world leaders on quack global warming science. They are ****ed.all

2. While not being an advocate of planned economies, I am an advocate of civil survival. For that reason, it would be a good idea for the states to inventory all resources and the flow of those resources in the event of mass disruptions. Resources include food growing, food processing, ammunition and weapons production, energy storage production and dissemination (especially considering energy flows across borders), shelters in place, shelters on the fly, medicine and vitamin production, stock piling and dissemination, the movement of medical personnel, retrieval of military personnel from outside the state, and a host of other factors that should be coordinated from the bottom up to the top down.

3. The fed needs to be prepared to launch nuclear weapons in the event of a precipitous drawdown overseas.

4. We need to realize that even 200,000 troops can not control social disorder in several regions at the same time. So withdrawing troops for riot control is not an option even if they all came home to do so. 200,000 troops or even a half million can not control 300 million people in this country. That in conjunction with temporary loss of command and control due to failures in electronics and networks means they would be useless. Their placement and movement from one zone of conflict to another can not be made as the situation dictates (the normal US method of "move, shoot and communicate") because the communication methods would not be dependable. Therefore, pre-planned movements would be necessary. It is kind of like the old North or South Koran tank column communication of waving a freaking flag back through the column). Something I observed as a private in Korea in 1987 when it was still in use over radio communications which we Americans love and is our Achilles Heel.

I know what the liberal typical Obama voter is thinking. That I am crazy. I can assure you that I am no more crazy than was Ron Paul for complaining about the Federal Reserve while the media ignored him. Now people are wondering just how it is that the Federal Reserver warrants trillions of dollars to banks that they won't identify. More and more people are wondering just how this freaking country works and their leaders are hard pressed to tell them.

NO they don't! in fact that is some of the dumbest crap I have ever read! The bailouts represent an intervention into free market capitalism preventing the system from cycling through its natural process.

True Capitalism would be If we didn't bail anyone out. Socialism is when we do.

When the bailouts don't do the trick it will be because we cannot stop the free markets from their natural processes!

The question now quite litterally is: "HOW MUCH MONEY DO WE WANT TO SPEND BEFORE WE LEARN THIS LESSON?"

This is not an adequet solution to the free market economic process, the system cannot prevail with our government throwing 62% of its GDP towards averting a recession every 7-8 years. People have to lose their jobs, assets have to lose their value and the system needs to correct itself, before more growth can occur.

Take the autos for an example. No one is saying the quality of a GM product is not about the same as a Toyota now days. Then you might ask why the imbalance in trade in value?

If you take two nearly identical products and one is 23,000.00 and the other one is 24,800.00 then the one that is 24,800.00 already loses an additional 1,800.00 in TRADE in VALUE upon leaving with the brand new car. This is in addition to other natural losses in trade in value.

What this means is the free market still works it is just that you don't get hit on the value until 4 years down the road when you want to trade in the two products. At that time you get less money for the GM.

If we just gave hundreds of BILLIONS, if not TRILLIONS of dollars to banks to EASE THE CREDIT CRUNCH ------- Why are the auto makers coming to the TAXPAYER for a loan? - GO TO ONE OF THE BANKS THAT JUST GOT THEIR CHRISTMAS PRESENT AND BORROW FROM THEM!!!!!!!!!!!!!!!!!!! WTF!!!!!!!!!!!!!!!!

YA'LL AIN"T PAYING ATTENTION. This is NOT I repeat NOT a matter of CONGRESSIONAL SPENDING. This is solely an executive branch decision. Remember "they have been working on this for months". The Fed has been bailing out since March to the tune of nearly $6 TRILLION. and NONE of it is under the jurisdiction of Congress.